Peregrinator Mark: If only money solved all problems

RJ Matson, The New York Observer and Roll Call

I want a suit like that.

Forgive me because I normally don't get political on my blog, but here we go...

On October 30, Vice President Biden said that 640,329 jobs had been created or saved because of the $787,000,000,000 stimulus package. Unfortunately, that number is inaccurate. Earl Devaney from the Recovery Accountability and Transparency Board said that there are lots of irregularities so that the number may be more or less than 600k. Such irregularities include spending $1.2 million in Utah's 4th congressional district. Utah only has 3 congressional districts. More than 58,000 jobs have been "created/saved" because of money spent even though no money has actually been spent on those projects.

My biggest problem isn't the irregularities. I expect irregularities in government, especially when tracking $787 billion package. My biggest problem is that VP Biden was proud to report 640,329 jobs had been created because the government had allocated $787 billion for stimulus. That's about $1.2 million of allocated money per job. According to recover.gov, $141.33 billion has actually been spent. That means the government has actually spent more than $220,000 per job created. In Mississippi, the government has spent $904.8 million, or about $263,000 per job. Of course, this is assuming the recover.gov's numbers are accurate, which is doubtful.

I understand the multiplier effect that says when stimulus money is given to one person he/she will spend that money elsewhere in the economy. Thus, the economy gets stimulated. Unfortunately, I strongly doubt the multiplier effect has had much effect because we have a 10.2% unemployment rate. Since we started recording this data 6 decades ago, the highest unemployment rate we've recorded was 10.8% in 1982. Today, 15.7 million people are looking for jobs but can't find them. 5.6 million are in long-term unemployment (have been looking for jobs for more than 6 months). 27 million are underemployed. Since December 2007, the number of unemployed has increased by 8.2 million. We've lost 5.3% of non-farm payroll jobs.

And Obama's administration is dubiously boasting that the government has saved 0.6 million jobs after a $787 billion stimulus?

Meanwhile, the deficit is about 10% of our GDP when it should be around 3%. Bush didn't help, but Obama isn't cleaning up the mess. I understand that stimulus can help the economy, but we have to eventually pay off this debt. Maybe in this globalized economy the old forms of stimulating the national economy don't work anymore; we spend too much of our money on imports so that the domestic economy doesn't get stimulated. I also wonder if the US should have let the present economy go a little more south so that we wouldn't stifle our future economy with enormous debt.